Ateneo de Manila School of Law Property Accession Charts (revised June 2012) Atty. Francis Ampil I. Rules when landowner (LO) – builder/planter/sower (BPS) makes constructions or plantings with materials of another (OM): Landowner – Builder/Planter/Sower (BPS) A. Good Faith LO-BPS can acquire the materials provided there is full payment. Owner of Materials (OM) Good Faith OM is entitled to full payment for value of materials or OM may remove materials provided there is no substantial injury to work done. B. Good Faith LO-BPS can acquire materials without paying for the value thereof and will be entitled to damages due to defects or inferior quality of materials. Bad Faith OM loses materials without indemnity and will be liable for damages due to defects or inferior quality of materials. C. Bad Faith LO-BPS can acquire the materials provided there is full payment plus damages. Good Faith OM is entitled to full payment for value of materials plus damages or OM may remove materials even if there will be substantial injury to work done plus damages. D. Bad Faith Same as A. Bad Faith Same as A. II. Rules when the builder/planter/sower (BPS) builds, plants, or sows on the land of another (LO): Landowner (LO) A. Good Faith Option 1: To purchase whatever has been built, planted or sown after paying indemnity which includes necessary expenses, useful expenses and luxurious expenses (if the LO wants to appropriate the luxurious improvements). Builder/Planter/Sower (BPS) Good Faith To receive indemnity for necessary, useful and luxurious expenses (if LO wants to appropriate the luxurious improvements) with right of retention over the land without obligation to pay rent until full payment of indemnity. To remove useful improvements provided it does not cause any injury (this is part of right of retention). Option 2: To oblige the BP to buy the land or the S to pay the proper rent unless the value of the land is considerably more than that of the building or trees. If LO does not appropriate luxurious improvements, BPS can remove the same provided there is no injury to the principal thing (the land or building). To purchase land at fair market value when value is not considerably more than that of the building or trees. If BPS cannot pay purchase price of the land, LO can require BPS to remove whatever has been built, planted or sown. If the value of land is considerably more than that of the building or trees, BPS cannot be compelled to buy the land. In such case, BPS will pay reasonable rent if LO does not choose Option 1. B. Good Faith Option 1: To acquire whatever has been built, planted or sown without paying indemnity except necessary expenses for preservation of land and luxurious expenses (should LO want to acquire luxurious improvements) plus damages. If BPS cannot pay the rent, LO can eject BPS from the land. Bad Faith Loses whatever has been built, planted or sown without indemnity and liable to pay damages. Entitled to reimbursement for necessary expenses for preservation of land but no right of retention. Not entitled to reimbursement for useful expenses and cannot remove even if removal will not cause injury. Not entitled to reimbursement for luxurious expenses except when LO wants to acquire luxurious improvements (value of which will be the one at the time LO enters into possession). Option 2: To oblige BP to buy land or S to pay proper rent plus damages. Option 3: To compel BPS to remove or demolish work done plus damages. Entitled to remove luxurious improvements if it will not cause injury and LO does not want to acquire them. Obliged to pay for land or proper rent and pay damages. Obliged to remove or demolish work done at his expense and pay damages. C. Bad Faith To acquire whatever has been built, planted or sown by paying indemnity plus damages. Good Faith If LO acquires whatever has been built, planted or sown, BPS must be indemnified the value thereof plus damages. (If LO does not acquire whatever has been built, planted or sown, BPS cannot insist on purchasing land). D. Bad Faith Same as A. BPS can remove whatever has been built, planted or sown regardless of whether or not it will cause injury and will be entitled to damages. Bad Faith Same as A. III. Rules when landowner (LO), builder/planter/sower (BPS) and owner of the materials (OM) are 3 different persons: Landowner (LO) Builder/Planter/Sower (BPS) Owner of the Materials (OM) A. Good Faith Good Faith Good Faith Option 1: To acquire whatever To receive indemnity from LO To receive indemnity from has been built, planted, or with right of retention over BPS who is primarily liable sown provided there is land until full payment. for materials; if BPS is payment of indemnity (which insolvent, to proceed against includes value of what has LO who is subsidiarily liable been built, planted or sown with no right of retention. plus value of materials used). Option 2: To oblige BP to buy land or S to pay proper rent unless value of land is considerably more than that of building or trees. To buy land or to pay proper rent. To receive indemnity from BPS only (LO is not subsidiarily liable) with right of retention until full payment and will have material rent lien against against BPS for payment of value of materials or to remove materials if there will be no injury building or trees. B. Good Faith Same as A. Good Faith Same as A. Bad Faith Whatever is the choice of LO, the OM: 1. loses the materials in favor of BPS and 2. will have no right to receive indemnity from BPS nor LO. C. Good Faith Option 1: To acquire whatever has been built, planted or sown without paying indemnity except for preservation of land and luxurious expenses (should LO want to acquire luxurious improvements) plus damages. Bad Faith BPS loses what has been built, planted or sown plus liable for damages but is entitled to be indemnified for necessary expenses for preservation of land and luxurious expenses (should LO want to acquire luxurious improvements) and has no right of removal even if removal will not cause damage. Bad Faith (Since both BPS and OM are in bad faith, treat them both as if they are in good faith). Option 2: To oblige BP to buy the land or S to pay proper rent plus damages. To buy the land or pay proper rent and liable to pay damages to LO. If LO chooses Option 1, OM has no right to remove materials even if there will be no injury or damage. If LO chooses Option 2, OM has right of removal provided there will be no injury or damage. Option 3: To oblige BPS to demolish or remove what has been built, planted or sowed plus damages. To demolish or remove what has been built, planted or sowed and liable for damages. Liable to pay for damages due to defects or inferior quality of materials. Whatever is the choice of the LO, OM has the right to receive indemnity for value of materials from BPS only (LO has no subsidiary liability for value of materials because OM is considered in good faith only insofar as BPS is concerned). D. Bad Faith To acquire what has been built, planted, or sown by paying indemnity plus liable to pay damages. Good Faith Good Faith To receive indemnity from LO To receive indemnity for value plus damages. of materials principally from BPS and in case BPS is insolvent, subsidiarily from LO. E. Bad Faith Same as D. Good Faith Same as D. Bad Faith No right to receive indemnity for value of materials from BPS nor LO (who ends up owning building or trees).